Jury convicts man of $600 million health care fraud, wire fraud and ID theft scheme | OPA

A federal jury today convicted a New York man in a more than $600 million health care fraud scheme, wire fraud and identity theft.

According to court documents and evidence presented during the trial, Matthew James, 54, of East Northport, operated a medical billing company that billed for procedures that were either more serious or completely different from those performed by doctors- James’ customers. James directed his physician clients to schedule elective surgeries through the emergency room so that insurance companies would reimburse at significantly higher rates. When insurance companies denied inflated claims, James posed as patients to demand that the insurance companies pay outstanding balances of tens or hundreds of thousands of dollars.

“James orchestrated a fraudulent medical billing scheme to steal from insurance companies and businesses to line his own pockets,” said Assistant Attorney General Kenneth A. Pollitt, Jr. of the Justice Department’s Criminal Division. “This sentence shows that medical professionals who fuel health care fraud will face justice.”

“The defendant was convicted of carrying out a daring scheme in which he used insurance companies as ATMs. He stole hundreds of millions of dollars until he was finally exposed by a mile-long paper trail, phone records of him impersonating patients, and text messages and emails with his co-conspirator physician clients demonstrating his criminal billing practices . For this massive fraud, a federal jury convicted him today,” said U.S. Attorney Breon Peace for the Eastern District of New York. “Health care fraud is not a victimless crime because fraudulent billing ultimately affects consumers who must pay the cost of higher insurance premiums.”

“Healthcare fraud, including fraudulent billing schemes like this one, costs U.S. taxpayers tens of billions of dollars annually. These crimes affect all of us in many ways, including increased health insurance premiums, higher out-of-pocket costs and co-pays for medical treatment, and reduced or lost benefits, just to name a few,” said Assistant Director Luis Quesada of the Division for FBI criminal investigations. “The FBI, along with our law enforcement partners, is committed to rooting out healthcare fraud in all its forms and bringing to justice those who seek to exploit our healthcare system.”

James was convicted of conspiracy to commit health care fraud, health care fraud, three counts of wire fraud and three counts of aggravated identity theft. He is scheduled to be sentenced at a later date and faces up to 10 years in prison for health care fraud conspiracy, up to 10 years in prison for health care fraud, up to 20 years in prison for each of the three wire fraud counts and a two-year mandatory minimum each for three counts of aggravated identity theft. A federal district court judge will determine each sentence after considering the U.S. Sentencing Guidelines and other statutory factors.

The FBI is investigating the case.

Acting Assistant Chief Miriam Glazer Dauerman of the Criminal Division’s Fraud Unit and Assistant U.S. Attorneys Catherine Mirabile and Antoinette Rangel of the Eastern District of New York are prosecuting the case.

The Fraud Unit leads the Criminal Division’s efforts to combat health care fraud through the Health Care Fraud Task Force Program. Since March 2007, this program, made up of 15 task forces operating in 24 federal districts, has indicted more than 4,200 defendants who collectively billed the Medicare program more than $19 billion. In addition, the Centers for Medicare & Medicaid Services, working with the Office of Inspector General at the Department of Health and Human Services, is taking steps to hold providers accountable for their participation in health care fraud schemes. More information is available at https://www.justice.gov/criminal-fraud/health-care-fraud-unit.

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